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SB 766

Appropriations: department of labor and economic opportunity; appropriations for fiscal year 2024-2025; provide for. Creates appropriation act.

2023-2024 Regular Session Introduced by Mary Cavanagh

The CARS Act requires clear total-price disclosures, bans deceptive misrepresentations, limits add-on charges, and establishes a new 3-day statutory right to cancel for certain veh

Senate conferees named 06/04/2024: Sens. Mary Cavanagh Sarah Anthony Jon Bumstead
#appropriations:departmentoflaborandeconomicopportunity
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WeVote Research Nonpartisan
Bill Summary · SB 766

SB 766 — California Combating Auto Retail Scams (CARS) Act (SB 766, Allen) — Summary

Note: SB 766 appears in the provided materials as the "California Combating Auto Retail Scams (CARS) Act" (author: Sen. Allen). The bill text portions below are drawn from the Legislative Counsel’s Digest and bill text excerpts included in the provided documents.

Purpose / Intent

The CARS Act is designed to protect purchasers and lessees of new and used motor vehicles from unfair and deceptive dealer practices by (1) prohibiting material misrepresentations about vehicle sales, financing, availability and remedies; (2) requiring clear, conspicuous disclosures (including total price and add‑ons); (3) restricting certain charges (especially for add‑on products a buyer will not benefit from); and (4) replacing the current contract cancellation option framework with a statutorily defined 3‑day right to cancel for certain used vehicle transactions.

Key provisions

  • New statutory title added to Civil Code (Title 1.5B — CARS Act). Waivers of the Act by consumers are void; remedies are cumulative.
  • Definitions: establishes key terms including “add‑on” (products/services not installed/provided by manufacturer), “auction,” “dealer,” “GAP agreement,” “material,” and “vehicle/motor vehicle” with enumerated exceptions (e.g., wholesale sales, non‑registration vehicles, fleet/commercial buyers, GVWR ≥ 10,000 lb).
  • Prohibitions:
    • Dealers may not make misrepresentations regarding material information about vehicle costs, financing/lease terms, availability at a “total price” stated by the dealer, or the buyer’s remedy if the dealer fails to sell/lease at that total price.
    • Dealers must make specified disclosures clear and conspicuous (total price and add‑on details). Used vehicles sold at auctions are exempt from some disclosure requirements.
    • Dealers may not charge for certain items in connection with sale/financing — including add‑ons the purchaser/lessee would not benefit from.
  • Cancellation/return rights:
    • Replaces prior “contract cancellation option agreement” regime with a statutory 3‑day right to cancel (buyer/lessee can cancel purchase/lease within 3 days as provided by the Act).
    • Restocking fee limits if buyer cancels: generally 1.5% of sale price (minimum $200, maximum $600). If dealer charged shipping, dealer may retain actual shipping cost instead (subject to caps). If vehicle driven > 250 miles, dealer may charge $1 per mile over 250, capped at $150.
  • Recordkeeping: dealers must create and retain for 2 years all records necessary to demonstrate compliance (prescribed records included in bill).
  • Construction: statute to be liberally construed to protect consumers. If any provision is invalid, remainder survives.

Who is affected

  • Dealers/licensed motor vehicle dealers doing retail sales and leases in California (new and used vehicles), and entities selling add‑on products/services in connection with vehicle transactions.
  • Consumers (vehicle purchasers and lessees) — increased disclosures, cancellation rights, and protection from deceptive practices.
  • Lenders, add‑on vendors, and auction participants are indirectly affected (by disclosure, charging and exemption rules).

Timeline / Enforcement / Misc.

  • Operative date: October 1, 2026 (the Act becomes operative on that date).
  • Remedies under the Act are in addition to other remedies available under law.
  • The bill text in the package is subject to legislative action — as of the supplied excerpts it was moving through committee/floor stages (multiple committee reports and floor documents dated May–Aug 2025 appear in the record).
  • The Act contains conformity clauses and severability; consumer waivers of its provisions are void.

If you want, I can prepare a one‑page compliance checklist for dealers (disclosures, recordkeeping, allowable charges, cancellation procedures) or a short plain‑language notice template for consumers explaining the new 3‑day cancellation right.

Compiled from official sources — confirm details with the bill’s official record.

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